Liquor warehouse deal disclosure fight rests on high court rulings

By DAVE SOLOMONNew Hampshire Union LeaderDecember 28. 2012 9:38PM
CONCORD - Lawyers on both sides of a right-to-know case involving a contract between the state Liquor Commission and an Ohio warehousing company rely on rulings by the state Supreme Court to support their arguments.

Concord Attorney Christopher Carter, representing Law Warehouses of Nashua, maintains that a ruling in the 1997 case of Union Leader Corp. v. New Hampshire Finance Housing Authority suggests that terms of the commission's deal with Exel Inc. must be fully disclosed as a matter of public interest.

Assistant Attorney General Lisa M. English, defending the state Liquor Commission, cited a state Supreme Court ruling in the 2004 case of Professional Firefighters of New Hampshire v. Healthtrust Inc., in which the justices overturned a lower court decision ordering disclosure of a public contract without a closed-door review to evaluate whether certain material could be exempt.

At stake is a contract worth $200 million and the jobs that go along with it.

Law was one of five unsuccessful bidders for a 20-year contract to provide warehouse services to the Liquor Commission, which announced in November it had awarded the contract to Exel Inc. of Westerville, Ohio, a logistics and supply chain firm wholly owned by the German company Deutsche Post DHL.

The Nashua company, which has held the contract since 1997, quickly filed a petition seeking full disclosure of the contract with Exel, along with several related documents its attorneys maintain are part of the contract.

After a Dec. 18 hearing, Merrimack County Superior Court Judge Richard McNamara gave attorneys in the case a deadline of Dec. 27 to file arguments on whether the privacy protections that exist while vendors are negotiating for a contract are forfeited once that contract is signed with a public entity.

The Liquor Commission has released some of the material, but with portions blacked-out, or "redacted." Law Warehouses wants to see all the documents, including the scoring sheets, used to award the contract, to determine if it can be legally challenged.

In their Right-to-Know petition, Law Warehouse attorneys argue that what they have seen in the material released so far raises serious questions about how the Liquor Commission proceeded in awarding the contract. "Based on the limited information in the highly redacted contract documents, it appears that the contract terms and requirements materially deviate from what was required and called for in the request for proposals, and ... the (Liquor Commission) improperly afforded Exel opportunities to materially revise its proposal."

The state and attorneys for Exel argued on Dec. 18 that material in the Exel contract can be legally redacted before public release because of exemptions in the state's Right to Know law for "confidential, commercial or financial information."

Citing the Professional Firefighters case, English wrote, "The court recognized that (the Right to Know law) exemptions apply to contracts with public bodies."

"If the government is required to release a third party's confidential and proprietary information, the release could cause substantial competitive harm to the third party, and could have a chilling effect on the willingness of potential bidders to submit proposals to a governmental entity," she wrote.

She also cited several federal court cases that allowed exemptions for portions of public contracts under the Freedom of Information Act.

Carter argued that the Union Leader case proved that all parts of a public contract must be disclosed because, as the Supreme Court ruled at the time, the public has an overriding interest in large public transactions. The Union Leader and Concord Monitor were seeking documents regarding housing developments financed by the state Housing Finance Authority.

"The 'large transactions' at issue in the Union Leader case concerned two housing developments," Carter wrote. "The 'transaction' at issue in this case is a 20-year contract with approximately $200 million. ... There exists here a similar, if not compelling, interest in disclosing all the terms of this transaction. That interest overrides any interest by either the NHSLC or Exel in nondisclosure."

Arguing on behalf of Exel, Manchester attorney Nicholas Holmes cited several cases in which other states have considered the issue and concluded that portions of a public contract can be exempt from a Right to Know request. He suggested a closed door review or hearing to determine what information can legally be withheld.